Expressway cost pegged at Rs20 crore/km

A draft cabinet note prepared by the National Highways Authority of India said a grant of Rs 10,000 crore has been proposed from gross budgetary support as the start-up corpus for the Expressway Authority.

The Union road transport and highways ministry has prepared a cabinet note outlining the structure of the proposed Expressway Authority as well as the financing model to construct 18,637 km of greenfield expressways by 2022.

A draft cabinet note prepared by the National Highways Authority of India (NHAI) said a grant of Rs 10,000 crore has been proposed from gross budgetary support as the start-up corpus for the Expressway Authority.

“It will be used to meet viability gap funding of projects, preparation of project reports and consultant fees,” said an official familiar with the development.

The note pegs the cost of construction of expressways at Rs 20 crore per kilometre. The expressways will be taken up on a public-private partnership model.

Viability gap funding will be up to 20% of the capital cost of the projects, with contiguous real estate development, as envisaged by surface transport minister Kamal Nath.

“Leveraging the sovereign powers, the adjoining land can be acquired, developed and sold by the proposed authority or its nominees. A provision to the effect will be made in the Act for the authority,” said the official.

NHAI is not in favour of sharing its portion of the cess being collected on consumption of petrol and diesel for funding highway construction.

“We have proposed the creation of a new formula in case the government wants to tap the cess route for funding. We have made an observation in the draft proposal that the NHAI’s cess portion be left untouched as it will affect our plan to become debt-free by 2030,” said the official.

Last fiscal, NHAI received Rs 7,400 crore or 85% of its financing for the year, through fuel cess.

The total debt requirement of NHAI has been pegged at Rs 192,000 crore by the BK Chaturvedi Committee, which was appointed by prime minister Manmohan Singh to chart India’s highway roadmap.

As for the administrative structure of the proposed Expressway Authority, the draft note has made the provision for a chairman and a board comprising six members.

Of this, three will be full-time members — one for finance and administration, one for land acquisition and project implementation and one for technical aspects related to construction, operations and management.

The three part-time members will be secretaries of the finance and roads ministries, and the Planning Commission.

An interesting feature would be that a joint-secretary level officer will be responsible for expressway patrolling.